Bandwill Pty Ltd v Spencer-Laitt
[2000] WASC 97
•31 MARCH 2000
BANDWILL PTY LTD & ANOR -v- SPENCER-LAITT & ORS [2000] WASC 97
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2000] WASC 97 | |
| Case No: | CIV:2114/1999 | 31 MARCH 2000 | |
| Coram: | TEMPLEMAN J | 31/03/00 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | The stay applications were adjourned sine die | ||
| PDF Version |
| Parties: | BANDWILL PTY LTD GAD RAVEH GRAHAM ST JOHN SPENCER-LAITT MALCA SPENCER-LAITT LODI HOLDINGS PTY LTD FREEHILL HOLLINGDALE & PAGE |
Catchwords: | Civil procedure Western Australia Application by first to third and fourth defendants for the stay of an action alleged to be unlawfully maintained and champertous |
Legislation: | Rules of the Supreme Court, O 29 r 2(1)(e) |
Case References: | Carob Industries Pty Ltd (In Liq) v Simto Pty Ltd, unreported, SCt of WA; Library No 970692; 11 December 1997 State of Queensland v JL Holdings Pty Ltd (1987) 189 CLR 146 Stogzinia Gadanska SA v Letrefas Incorporated, unreported; Court of Appeal; 9 February 2000 Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- First Plaintiff
GAD RAVEH
Second Plaintiff
AND
GRAHAM ST JOHN SPENCER-LAITT
First Defendant
MALCA SPENCER-LAITT
Second Defendant
LODI HOLDINGS PTY LTD
Third Defendant
FREEHILL HOLLINGDALE & PAGE
Fourth Defendant
Catchwords:
Civil procedure Western Australia - Application by first to third and fourth defendants for the stay of an action alleged to be unlawfully maintained and champertous
(Page 2)
Legislation:
Rules of the Supreme Court, O 29 r 2(1)(e)
Result:
The stay applications were adjourned sine die
Representation:
Counsel:
First Plaintiff : Mr D M Stone
Second Plaintiff : Mr D M Stone
First Defendant : Mr C V Colvin
Second Defendant : Mr C V Colvin
Third Defendant : Mr C V Colvin
Fourth Defendant : Mr G R Donaldson
Solicitors:
First Plaintiff : Williams & Hughes
Second Plaintiff : Williams & Hughes
First Defendant : Gary Deane & Assoc
Second Defendant : Gary Deane & Assoc
Third Defendant : Gary Deane & Assoc
Fourth Defendant : Freehill Hollingdale & Page
Case(s) referred to in judgment(s):
Carob Industries Pty Ltd (In Liq) v Simto Pty Ltd, unreported, SCt of WA; Library No 970692; 11 December 1997
State of Queensland v JL Holdings Pty Ltd (1987) 189 CLR 146
Stogzinia Gadanska SA v Letrefas Incorporated, unreported; Court of Appeal; 9 February 2000
Case(s) also cited:
Nil
(Page 3)
1 TEMPLEMAN J: This matter comes before me this morning by way of a direction summons following on from an earlier direction summons on 24 February, at which the counsel for the respective defendants in the head action, as I will call it, 2114 of 1999, foreshadowed applications to stay that action on the basis that it was being unlawfully maintained. That gave rise to some discussion as to how stay applications might be pursued.
2 I then adjourned the matter so that the parties could consider that question. In due course I received submissions from counsel and I have considered the matter myself. I came to the preliminary view that it would probably be undesirable for me to entertain an application for stay in the circumstances of this case.
3 When the matter came on this morning I informed counsel of my preliminary view and the reasons for it. I invited submissions so that I could give further consideration to this question.
4 Having heard the submissions I am confirmed in my view that I should not entertain the stay applications. That is not to say that I would dismiss them: that would plainly be wrong. Rather I would adjourn them so that they came on with the trial of the actions. It seems to me that the actions are so closely interlinked that some order must be made in due course for them to be either consolidated or tried together.
5 I will now set out briefly my reasons for taking that view. Essentially I think I have to exercise three discretions. First, I have a discretion in the way that I manage this case because these three actions are in the long causes list for the reasons which are set out in the relevant practice direction. In particular, I have a discretion under O 29 r 2(1)(e) Rules of the Supreme Court to dispense with any interlocutory proceeding.
6 Secondly, the stay applications are made by way of chamber summons supported by affidavit evidence. The counsel for the defendants say that the stay applications cannot be disposed of properly unless the deponents to the various affidavits are cross-examined.
7 I agree with that. However, the defendants have no right to cross-examination on the affidavits. That again is a matter of discretion. It is a discretion which on the authorities will only be exercised in exceptional circumstances.
8 Thirdly, I have a discretion whether or not to stay the action even if it was being maintained.
(Page 4)
9 The difficulty I have is in separating out the matters which it would be necessary to determine in the stay applications from the issues which arise in the main action.
10 Put very shortly: in the main action Mr Raveh contends that there were breaches of duty owed to him by Mr Laitt and by Freehills, his former solicitors.
11 He contends that as a result of those breaches of duty his very substantial assets are locked away under the control, effectively, of Mr Laitt. He contends that he has been made impecunious as a result of, first, the position that he was put in as a result of breaches of duty, and secondly, as a direct result of Mr Laitt's conduct in taking advantage of the position of control which he now occupies.
12 As a result, Mr Raveh says, he had no option but to seek assistance from the interests associated with Mr McLernon who are the defendants in the other actions. That is Mr Raveh's contention.
13 Mr Laitt's contention is that it is Mr Raveh who has acted quite improperly over the years - and in particular, in recent times - in attempting to extract moneys from the Peters and Brownes Group of companies or his shareholdings in them. It is contended that he is acting quite improperly because it was never the intention that he should be entitled to have access to those funds in the circumstances which have arisen.
14 Freehills deny that there was every any impropriety on their part. Mr Laitt and the other defendants and Freehills contend that the action, which is undoubtedly being funded by interests associated with Mr McLernon, are being maintained in a way which constitutes an abuse of the process of the court.
15 It seems to me that it is really impossible to separate out those issues. Mr Donaldson who appears for Freehills says that the case against Freehills is really only a money claim: that different considerations apply to it from those which apply to the claim against Mr Laitt and interests associated with him.
16 In my view that is not so, because of the assertion by Mr Raveh that it was Freehill's breach of duty that put him in the position in which he finds himself, which has necessitated his seeking financial assistance to fund the litigation.
(Page 5)
17 In those circumstances I do not see how I can resolve the question of stay without, as I have said, going into the merits of the head action to a very great extent. To do that would clearly be an inefficient way of proceeding because it would require litigation to be repeated to a considerable extent, possibly even before different judges. There is no guarantee that the judge who tried the stay application would necessarily be the trial judge in the head action. That would add enormously to the inefficient disposition of the matter.
18 The law relating the circumstances in which a maintained action will be stayed has been developing over recent years. Counsel for Freehills referred me this morning to a decision of Anderson J in this Court, Carob Industries Pty Ltd (In Liq) v Simto Pty Ltd, unreported, SCt of WA; Library No 970692; 11 December 1997.
19 That is a case in which Anderson J, on affidavit evidence, and without cross-examination, stayed an action on the grounds that it was being illegally maintained and was therefore vexatious, oppressive and an abuse of process. That case was an unusual one because the hearing of the application for the stay was not conducted until after the Full Court had disposed of the substantive proceedings on appeal.
20 The reason that was done was that the Full Court was not in a position to deal with the stay application because the evidence relating to it was then incomplete. However, in the course of deciding to proceed with the substantive appeal and adjourn the stay application, the learned Chief Justice said at page 5 of the decision:
"If at the end of the day the application for a stay is successful, any prejudice which may be caused to the respondent can be rectified by way of appropriate orders for costs including, if a case is made out for them, costs on an indemnity basis."
21 Now, that supports my view that in an appropriate case, which I think this is, the stay application can be determined at the trial, in effect, so that if there is any prejudice it may be cured in an appropriate manner.
22 I should say of course, that one of the essential elements of a cause of action in maintenance is special damage. It is urged on me by Mr Donaldson that Freehills is now suffering special damage because it is acting for itself and therefore incurring costs which cannot be recovered.
23 However, it seems to me that if Freehills is successful ultimately in the stay application then, to the extent that costs it is now incurring could
(Page 6)
- not be recovered, would constitute special damage and would therefore be recoverable. If Freehills is unsuccessful then of course the action should never have been stayed in any event.
24 The other aspect of Carob Industries v Simto which distinguishes it from the present case, is that there was no evidence from the person who was said to be maintaining the action. Such affidavit evidence as there was, made it perfectly plain that he was maintaining the action in an inappropriate and improper manner. He apparently sought no opportunity to defend himself against that charge.
25 That is not the present case. In the present case Mr McLernon has sworn a very substantial affidavit, to which he has exhibited many documents, in which he defends his position and those of the companies with which he is associated. He contends that he is not maintaining the action in the way complained of.
26 It is said against him that he has fomented the dispute between Mr Raveh and Mr Laitt and that he has therefore intermeddled in the action. Now, I could not adjudicate on that issue without having Mr McLernon cross-examined on his affidavit: so the case is quite different in that respect from Carob v Simto where there was nothing on affidavit evidence by way of defence to the charge of maintenance and clear evidence that it was being maintained.
27 Again, I could not determine whether Mr McLernon had fomented the dispute between Mr Raveh and Mr Laitt without exploring the dispute itself and the origins of that dispute as alleged both by Mr Raveh and Mr Laitt. In order to explore that dispute it would be necessary, in my view, to have regard to the very considerable history of their relationship, extending over some 20 years and involving very complex factual issues.
28 All of those considerations, to my mind, militate against the determination of a stay application at this stage.
29 There is another consideration, the third matter of discretion. That is whether, even if an action is being maintained, it should be stayed at all.
30 In Anderson J's judgment that issue was not addressed. It seems to me it was not necessary for it to be addressed because, in the unusual circumstances to which I have referred, the stay application came at the conclusion of the action.
(Page 7)
31 However, it is clear from the judgment itself that various recent decisions in relation to maintenance and stay of proceedings were not cited to Anderson J. There is a substantial number of such decisions. It is not necessary to refer to them in great detail.
32 It is sufficient to say that the current judicial trend is against staying an action, even if it is being maintained, unless the maintenance involves what has been described as trafficking in litigation; a term which is deliberately chosen, I think, as a pejorative term representing something which is objectionable and which may amount to, or contribute to, an abuse of the process of the court.
33 The authorities are referred to in a number of cases, the most recent, which was a judgment of the English Court of Appeal, was handed down on 18 February this year in Stogzinia Gadanska SA v Letrefas Incorporated, unreported; Court of Appeal; 9 February 2000 which has been provided to me, I think, from the service provided by the English Court of Appeal on the Internet.
34 It also has been urged on me by Mr Donaldson that to the extent that I am exercising a discretion in the management of this case, I should not do so in a way which results in injustice. Mr Donaldson refers, of course, to the State of Queensland v JL Holdings Pty Ltd (1987) 189 CLR 146 case in the High Court. I am fully aware of that decision and the implications of it and I have taken that into account in the exercise of my discretion or discretions.
35 In deciding not at this stage to entertain the stay application I am not, I think, denying any of the defendants any substantive right. They have a right to claim that the action is being unlawfully maintained. They have a right to have that allegation explored and they have a right to raise the question whether the action should be stayed. However, to paraphrase the Chief Justice in the Carob Industries case: if at the end of the day it appears that a stay should have been granted, then any prejudice caused to the defendants as a result of my present directions can be rectified by way of appropriate orders for costs, including costs on an indemnity basis.
36 For all those reasons I have come to the conclusion that I should not now deal with the question of the stay: that I should simply adjourn the stay applications sine die with a view ultimately to giving a direction that they be dealt with at the hearing of the substantive matters.
0
2
1